Krishna questions AI spending

Arvind Krishna, president and chief executive officer of International Business Machines Corp., recently questioned corporate spending on cutting-edge artificial intelligence models, stating that open-weight alternatives now offer nearly equivalent performance at significantly lower costs. He noted that open-weight models now operate at a cost per token representing 10 percent to 25 percent of that of leading models.

Cost comparison highlights efficiency

Krishna emphasized the cost difference, asking companies whether they prefer a solution that costs 10 percent of the price if it is as effective as 90 percent of the best, or would prefer to pay a cost 10 times higher. He noted that an average large enterprise could start with perhaps two or three racks, which does not represent an enormous infrastructure, but allows it to run these open-weight models.

Performance gap narrows

Krishna noted that at the end of 2024, open models obtained scores significantly lower than those of leading models during performance tests, but the gap has narrowed to the point that alternative models now demonstrate an efficiency of about 90 percent. He explained that the profitability of open-weight models converges with another major trend in the corporate world: sovereign AI.

Sovereign AI drives demand

Companies increasingly want to maintain control over their sensitive data, logs, and model activities, which drives demand for on-site and private AI infrastructure. For most daily business tasks, such as email summarization, responding to customer calls, or reviewing contracts, Krishna stated that these less expensive alternative models are sufficient.

IBM reports financial results

Krishna's comments accompanied the release of IBM's third-quarter financial results, during which the company recorded total revenue of 17.1 billion dollars. Jim Kavanaugh, senior vice president and chief financial officer of IBM, reported a 9 percent acceleration in software-related revenue.

Meta supports open-source AI

This statement echoes the statements of Mark Zuckerberg, founder and chief executive officer of Meta. In 2024, he emphasized the essential role of open-source AI and the advantages it provides for developers, Meta, and the world at large. He detailed Meta's collaboration with major technology companies to promote an extended AI ecosystem, advocating for open-source to be the future of AI innovation and the industry standard.

Krishna's compensation and workforce contrast

Arvind Krishna holds three titles at IBM: chairman of the board, chief executive officer (CEO), and president. His total package for the year 2025 amounted to 38 million dollars, equivalent to the combined salary of 765 ordinary IBM employees. The CEO's compensation increased by 51 percent in 2025, reaching 38 million dollars while the median compensation of its 270,000 employees barely remained above 49,000 dollars.